election analysis

Iran's Economic Collapse Undercuts Romney

An Iranian street money exchanger holds Iranian banknotes with a portrait of revolutionary founder Ayatollah Khomeini, in the main old Bazaar of Tehran in January.(AP Photo/Vahid Salem)

The news came this week just as Mitt Romney’s attack on President Obama’s allegedly weak leadership in the Mideast was reaching a rhetorical climax: Iran’s currency, the rial, was in a state of collapse, apparently the delayed outcome of U.S.-orchestrated sanctions against Tehran.

If Iran’s increasingly cut-off economy is in fact descending into chaos—its currency has plunged by about 40 percent in the last week, leading to hyperinflation fears—then Romney may well lose what had become his most potent foreign-policy criticism of the president. And coming on the eve of Wednesday’s first presidential debate, which both Republican and Democratic pundits have argued is critical for Romney, the timing could not be worse. With just a month left in the race, the GOP nominee is desperately looking for some other issue than a mildly improving U.S. economy with which to attack Obama’s tenure.

Until now, there had been precious little good news for Obama out of the Mideast in the three weeks since Ambassador Chris Stevens’s death in Libya, and that had lent some credibility to the Romney critique. The administration’s explanations for the Sept. 11 death of Stevens, the first U.S. ambassador to be killed in the line of duty since 1979, were confused at best, inviting a tsunami of GOP criticism that the president’s hopeful narrative for the region was naïve, even deceitful. The bloody civil war in Syria raged unabated. Armed Salafist and al-Qaida groups have raised fears of an arc of Islamist insurrection along the southern half of the Mediterranean from Libya to Syria. And, above all, nothing seemed to be working to avert the worst catastrophe of all: an Iranian nuclear bomb.

All these developments appeared to bolster the critique that the Romney campaign has been coalescing around since last spring: that Obama has “has been outmatched by events” in the Mideast, as a Romney senior adviser told National Journal in April. "Obama came to power with a view of the region that would make progress in the Arab world and get the Iranians back to the table. He would deal with the Israeli-Palestinian issue, and the key to that was dealing with settlements. Instead it's been chaos."

Romney sought to pile on with an op-ed in The Wall Street Journal on Monday in which he wrote that Obama lacked “resolve” and, as a result, “our country seems to be at the mercy of events rather than shaping them." He is also expected to deliver what was billed as a major foreign-policy address making many of the same points.

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True, the increasing signs of economic distress inside Iran will probably not do much, at least immediately, to forestall Tehran’s nuclear plans. But Iran’s internal problems do tend to vindicate Obama’s contention that his tougher sanctions policy is working, and that he does in fact have a coherent Mideast policy. Those efforts, involving unprecedented cooperation between the U.S. and Europe, have culminated in tougher sanctions that have made it much more difficult for Iran to sell its oil. “Because of the sanctions that the president has led the world in imposing, this latest news shows how incredibly crippling this has been to Iran’s economy,” an Obama campaign official said on Tuesday, arguing that the rial’s collapse will directly affect that country’s nuclear ambitions. “The less money they have, the fewer resources they have to fund things they need for nuclear and missile, then the less they will be able to do.”

Beyond that, Romney has failed to make an effective case that outcomes in the Mideast would have been different had he been in charge. His op-ed, titled "A new course for the Mideast," did not deliver that at all, several critics said. "There's nothing 'new' in it, and it provides no 'course for the Middle East,' " former Mideast negotiator Aaron David Miller wrote in Foreign Policy. "If anything, it takes us back to the kind of muscular nonsense and sloganeering that has wreaked havoc on our credibility in recent years."

Even pundits on the right have a hard time accepting the idea that more assertive American leadership would produce more compliant, pro-American leaders out of the Arab Spring, rather than Islamist empowerment, which many Mideast experts say was historically inevitable. Romney has not spelled out what he would do very different on Iran, beyond going to war. Nor has he said specifically how he would navigate the problem of arming the rebels in Syria, which he has argued for, when what diplomats call the “end user” problem has not been solved. And that question—whose hands would such weapons ultimately fall into?—has been brought into greater relief by the appearance of violent jihadist, possibly Qaida-linked groups in post-Qaddafi Libya that led to Stevens’s death.

In a rebuttal to Romney on CNN's website on Tuesday, former Defense Undersecretary Michele Flournoy, who has become the administration's chief point person on foreign policy, wrote along with two coauthors that Romney "has failed to outline any policies to go after al Qaeda and its affiliates. There is a reason for this: On the president's watch, Osama bin Laden is dead and more al Qaeda senior leaders have been taken off the battlefield than at any time since 9/11."

The Obama team also argues that the news is not all bad out of the Arab Spring, and the Romney alternative is to retrace the hawkish steps by the George W. Bush administration during Bush's first term. For example, some 30,000 Libyans recently demonstrated in support of America after Stevens's death—an impossible thing to imagine in postwar Iraq, where Washington’s horrifically expensive, nearly decade-long involvement has left little pro-American sentiment. “Romney backed the war in Iraq, the biggest foreign policy disaster in a generation, and his advisers—the people who would populate the national security establishment in a Romney administration—are a Who's Who of the war's architects," Flournoy and her coauthors wrote. "Not only did that war cost more than 4,400 American lives, leave more than 32,000 Americans wounded and cost taxpayers nearly $1 trillion—it empowered Iran and Syria and undermined U.S. credibility in the region and around the globe."

Until the debacle surrounding Stevens's death, Obama had done an effective job of neutralizing what has traditionally been a GOP strong point: national security. With the latest news out of Iran, he may have gotten his mojo back again.